Hotel tax revenue better than expected

An influx of unexpected, overnight visitors has turned into
welcomed handfuls of cash for the city of Gilroy.
Hotels and motels in the Garlic Capital collected $125,000 more
in occupancy fees than expected over the last year, a positive 14
percent difference that’s hopefully a sign of steady things to
come, said Jane Howard, executive director of the Gilroy Visitors
Bureau.
An influx of unexpected, overnight visitors has turned into welcomed handfuls of cash for the city of Gilroy.

Hotels and motels in the Garlic Capital collected $125,000 more in occupancy fees than expected over the last year, a positive 14 percent difference that’s hopefully a sign of steady things to come, said Jane Howard, executive director of the Gilroy Visitors Bureau.

“It’s nice to have some good news,” Howard said. “You kind of hold your breath and say, “‘OK, we’re going in the right direction.’ ”

The city of Gilroy originally projected it would receive about $764,000 in the fees, known as transient occupancy taxes, in its previous budget that ran from July 1, 2010 to June 30, 2011.

But audited returns show Gilroy’s hotels and motels had a better-than-expected year, raking in more than $889,000 thanks in part to a spike in visitors for weddings and guests who ventured to the area for last June’s U.S. Open professional golf championship at Pebble Beach on the Monterey Peninsula.

“We’re also seeing an increase in both leisure traveler and business traveler,” Howard explained. “It’s a nice bump.”

Keeping with the professional golf theme, Gilroy City Councilman Dion Bracco said local lodging might also received a boost from the Frys.com Open, held last Oct. 14-17 at the CordeValle Golf Club in San Martin, and is returning Oct. 3-9.

“It could be lots of things. It could be the Visitors Bureau promoting Gilroy, the wineries being promoted, everything around us,” Bracco said. “Hopefully it means that people are traveling and stopping by again.”

Transient occupancy taxes have been wildly unpredictable in years past, according to city budget records. While the latest round saw a $125,000 increase, the taxes had fallen by more than $100,000 over fiscal years 2007-08 and 2008-09.

“There’s so many unknowns. We’ve been all over the board,” said Howard, who added that projections call for about a 1 to 2 percent increase over the next fiscal year.